Market Trends of Philippines Data Center Cooling Industry
Liquid-based Cooling is the Fastest-growing Segment of the Market
- Liquid cooling takes advantage of the superior heat transfer properties of water or other liquids to support efficient and cost-effective cooling of high-density racks, up to 3,000 times more effective than air. Long proven in mainframe and gaming applications, liquid cooling is increasingly being used to protect rack servers in data centers across the region.
- Direct liquid cooling solutions consistently deliver impressive partial power usage effectiveness (PUE) ranging from 1.02 to 1.03, surpassing the efficiency of even the most efficient air cooling systems by a marginal single-digit percentage. However, it is essential to note that a significant portion of the energy efficiency improvement attributed to DLC is not reflected in the PUE metric. This is due to the fact that traditional servers incorporate fans that draw power from the rack, and their control mechanisms are factored into the IT power consumption portion of the PUE calculation. These fan power requirements are considered part of the data center's overall payload.
- Technological advances have made liquid cooling easier to maintain, scalable, and affordable, reducing data center liquid consumption by more than 15% in tropical climates and 80% in greener areas. The energy used for liquid cooling can be recycled to heat buildings and water, and advanced artificial refrigerants can effectively reduce the carbon footprint of air conditioners.
- Furthermore, the demand for online shopping has increased considerably post-pandemic. Cashless payments, product quality, and shopping at the convenience of the home have increased the demand proportionally for these online e-commerce platforms. The leading online e-commerce platforms are Shopee, Lazada, Zalora, and BeautyMNL. The Philippine e-commerce market is expected to increase in value from USD 17 billion to USD 24 billion by 2025. Thus, growing data consumption and the need for storage are expected to aid in the expansion of data center facilities in the country.
Understand The Key Trends Shaping This Market
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IT and Telecommunication is the Largest Segment of the Market
- The ICT industry includes both IT and telecommunications markets. IT investment is on the rise, and the demand for the ICT industry is expected to grow significantly over the next five years. According to the Department of International Trade, the sales of Philippine software services are expected to reach USD 95 million by 2025.
- The Philippine Development Plan (PDP) 2023-2028 highlights digital transformation as a key theme. During his second State of the Nation Address (SONA), President Marcos mandated all government agencies to digitize essential public services. Initiatives supporting this directive encompass the creation of additional common tower infrastructures to bolster connectivity, the digitalization of business registration processes at the local government level, and the consolidation of online government services into a unified platform via the eGov PH Super App.
- Cyberattacks are expected to increase over the next five years. Advances in IT operations protect the ICT industry from cyberattacks. As cloud-based platforms and enterprise software provide real-time data, they create greater value for businesses, especially by providing remote access. For example, Microsoft introduced new and enhanced security services under a new service category known as "Microsoft Enterprise Security Professionals."
- Given the increasing digital adoption, Alibaba Cloud Intelligence intends to invest more in the Philippines after opening a data center. Allen Guo, the country manager for the technology firm, said at a press conference in Makati that the company was considering expanding the capacity of its data center to accommodate the growing use of digital platforms. Around 88% of the companies in the Philippines use cloud-based solutions. The growing demand for analytics and software for business purposes by the public and private industries is expected to boost the growth of the segment.
